Over the past few months the Department of Labor has issued three pieces of guidance that are (potentially) significant for plan sponsors and plan fiduciaries. These include final regulations describing new restrictions on the use of environmental, social and governance factors (“ESG”) in the selection of plan investments, an interpretative bulletin) containing new rules for plan fiduciaries with respect to proxy voting, and a class-wide prohibited transaction exemption permitting fiduciaries to receive (otherwise prohibited) forms of compensation--such as commissions. These three pieces of guidance may prove to be significant--if they are ever allowed to go into effect.

The Department of Labor has issued new guidance defining when an investment adviser is a plan fiduciary--and the standards that must be followed by investment fiduciaries. The guidance reinstates a 1975 test defining investment fiduciaries and proposes a new prohibited transaction exemption allowing fiduciaries to collect commissions and third-party payments.